Magazine article The American Prospect

It's Jobs, Stupid

Magazine article The American Prospect

It's Jobs, Stupid

Article excerpt

It's the most anemic jobs recovery on record. Productivity is soaring, but that's mainly because fewer workers are doing more. At least 150,000 new jobs have to be created each month just to keep up with population growth. We haven't come close.

In December, the private sector produced a paltry 1,000.

Not to be ghoulish about it, but this could be good news for Democrats seeking to regain the White House and stem the Republican tide in Congress. There can't be a genuine recovery until jobs come back, they aren't likely to roar back within the next nine months and George W. Bush will have a hard time convincing voters that he's a good steward of the economy unless Americans feel that the recovery is on solid footing.

But to be credible, Democrats have to come up with their own plan for how to spur job growth. And that plan has to respond directly to the structural changes in the economy that account for this unprecedented dearth of new jobs. Before I get to the plan, you need to un-derstand those changes. "Jobless" recoveries aren't supposed to go on this long. It used to be that businesses started hiring again when demand picked up. No longer. Technology and globalization have given companies two easy ways of temporizing. They can substitute off-the-shelf software (automated scanners at the supermarket, for example, or e-ticket kiosks at the airport). Or they can outsource to low-wage workers abroad (back-office service workers in India or manufacturing workers in China).

Eventually demand will pick up enough to restore job growth. There's still a limit to what software can do and how much work can efficiently be outsourced. But in the meantime, millions remain unemployed, are too discouraged to look for work, have to settle for jobs paying far less than the ones they lost or are forced to become self-employed "consultants" (glorified temps, essentially). Worse yet, the "meantime" could drag on for years. With so many people facing such uncertainties, consumer demand may well stall.

Bush's two major job initiatives are to gut the overtime laws and seek to allow more guest workers into the country. Both will only make the bad situation worse. The requirement to pay time and a half for overtime gives employers an incentive to hire more workers; eliminate overtime pay and that incentive is lost. …

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